Saturday, April 20, 2013

The BLS employment report shows the official (U3) unemployment rate ticked down 0.1 percentage point
to 7.6%, but not because people gained employment. Instead the
unemployment rate dropped due to less people participating in the labor
market. The labor participation rate just hit a record low, not seen
since May 1979 when many segments of the population was still quite
discriminated against in the workforce. One cannot just blame
retiring baby boomers for low labor participation rates This article
overviews and graphs the statistics from the Current Population Survey
of the employment report. Below is a graph of the official
unemployment rate.

The labor participation rate is at artificial lows,
where people needing a job are not being counted. A drop isn't good
actually for it means that those who dropped out of the labor force are
staying out of the labor force. For those claiming the low labor
participation rate is just people retired, we proved that false by
analyzing labor participation rates by age.

The number of employed people now numbers 143,286,000, a -206,000 monthly decline. We describe here
why you shouldn't use the CPS figures on a month to month basis to
determine actual job growth. These are people employed not actual jobs.
In terms of labor flows, the employed has been static for the last
six months, a decline of 42,000 employed since October
2012. From a year ago the employed have risen 1.266 million, but bear
in mind the noninstitutional population has also increased by 2.391
million during the same time period. The statistics from the CPS
generally vary widely from month to month. Below is a graph of the
Current Population Survey employed.

Those unemployed stands at 11,742,000, a decline of -290,000 from last
month. Below is the change in unemployed and as we can see, this number
also swings wildly on a month to month basis.

The number of people counted as unemployed has also remained fairly
static. From a year ago the official unemployed as declined by
-944,000. , For the last six months, the unemployed has dropped by -506
thousand people. Yet from the employed levels we can see these people
are going into not in the labor force instead of getting a job. Below is a graph of the unemployed.

We want to show a historical graph of the unemployed going back to
1948. This is just ridiculous. The number of official unemployed
stands at 11,742,000. In November 1982, the unemployed was 11,938,000.
That is over 30 years ago, during the 1980-1982 recession, and the
civilian noninstitutional population has increased by 76.3 million
people since then. Congratulations America, over five years past the
official end of the recession the jobs crisis is still worse than it was
during the height of the 1980-1982 recession.

Below is a graph of those considered employed, in maroon, scale on
left, against those considered unemployed, in blue, scale on right, by
the BLS methods. It is only recently that the growth rate of the
employed has exceeded the growth rate of the unemployed (the maroon line
exceeding the blue line).

The civilian labor force, which consists of the employed and the
officially unemployed, is now at 155,028,000. This is a decline of
-496 thousand from last month. Notice in the graph below how many
more people are in the labor force than at the start of the 2008
recession. Population increases every month and this post gives details on that increase, while this one describes BLS labor concepts as well as how many jobs are needed just to keep up with the increased population (.

It's fairly clear the American workforce is ending up in the not counted statistics.Those not in the labor force now tallies to 89,967,000, an increase of 663,000
from last month. Below is the change to show on a month to month
basis, the CPS shows quite a bit of variance. We talk about the wild
monthly CPS changes in this post.

Below is a graph of the civilian labor force, in maroon, scale on left,
against those not in the labor force, in blue, scale on right. Notice
how those not in the labor force as a trend exceeds those considered
employed and unemployed. What we see is a never ending growing segment
of the population that is considered neither employed or unemployed,
i.e. not in the labor force, increasing, above the trend line of those
who would be naturally dropping out, such as the retired and those in
school. This is the god awful, terrible aspect of this report. Once
again we see a huge segment of the U.S. population that could be working
or looking for work laying idle. Not in the labor force does include
retirees, yet clearly 663 thousand baby boomers did not just magically
retiree in a month.

Those considered employed as a ratio to the total Civilian
noninstitutional population stands at 58.5%, a -0.1 percentage point
drop from last month. This ratio hasn't been this low since August
1980, as shown in the graph below. This implies there are many
people who could be part of the labor force who are not anymore.

A huge problem with today's labor market is the gross number of working
part-time generally. There are a huge number of people who need
full-time jobs with benefits who can't get decent career
oriented positions. Those forced into part time work is now 7,638,000,
and drop of -350,000 from last month. While still a hell of a lot of
people are stuck with part-time hours who need full-time work, this is
the best news of this month's unemployment report. With less
people working part-time, eventually businesses should have to hire
additional workers (unless of course they offshore outsource to China
and India).

Below is a graph of forced into part-time work because they got their
hours cut, graphed as a percentage of the total employed. Part-time
due to cut hours is known as slack work conditions and consisted of
4,906,000 people for March. This is a decline of -230,000 from last
month. Below is a graph of forced part-timers due to slack work
conditions as a percentage of the civilian labor force. We think this
graph is a recession economic indicator, and notice the
slope matches strongly the gray recession bars of the graph. The
percentage of people in working part-time due to slack economic
conditions has stayed extremely high since the start of the Great
Recession, even though it is overall clearly on a downward trend.

U-6 is a broader measure of unemployment and includes the official
unemployed, people working part-time hours because that's all they can
get and a subgroup not counted in the labor force but are available for
work and looked in the last 12 months. Believe this or not, the U-6
alternative unemployment rate still leaves out some people wanting a job
who are not considered part of the labor force. U-6 declined a
whopping -0.5 percentage points to 13.8%. The reason for the massive
drop in U-6 are the declines in part-timers shown above.

The long term unemployed, or those unemployed for 27 weeks and over,
stand at 4,611,000 people. This is a decline of -186 thousand from
last month. The long term unemployed are the crisis of our time and this figure just isn't decreasing and
they are getting hired. The long term unemployed are now 39.6% of the
total unemployed and this percentage decreased -0.6 percentage points
from last month. Because we see such an increase in those not in the
labor force, odds are we just saw more long term unemployed drop off the
unemployed statistics radar instead of actually getting a job. Behind
this figure is economic devastation for 4.6 million people.

The marginally attached are people not in the labor force because they
have not looked for a job in the last month, but have looked for a job
in the last year. This number has ballooned since 2007 and not returned
to pre-recession levels. The graph below is the number of people
considered marginally attached to the labor force, currently at 2.326
million.

Discouraged workers are people, not counted as part of the civilian
labor force, who not only want a job, but also looked for one in the
last year. These people aren't job hunting now because they
believe there are no jobs out there. Below is the graph of discouraged
workers, currently at 803 thousand people and are a subset of the
marginally attached. Discouraged workers is kind of a baramoter for how
the job market is perceived.

One of our favorite statistics from the CPS survey is how many people who are considered not in the labor force, want a job
now. It is a direct survey question from the CPS. The survey asks
people who are not being counted in the unemployment statistics and
official unemployment rate if they want a job. The number who answer
yes currently stands at 6,722,000. This is a 101
thousand person decrease from last month. That's an astounding number
of people not counted who report they actually want a job and roughly 2
million higher than before the recession. This figure includes the
discouraged workers and marginally attached, but is seasonally adjusted,
unlike the above.

The average length of unemployment is now 37.1 weeks, an increase of
0.2 weeks from last month. This still is an absurdly long amount of
time to be unemployed and has stayed highly elevated for years, an
uptick is not what we want to see.

The average duration is also so
high due to the long-term unemployed, who clearly are having a hell of a
time getting a job, many facing age discrimination.

The median time one is unemployed, which means 50% of people have
gotten a job in this amount of time, and is 18.1 weeks, an increase of
0.3 weeks from last month..

Those unemployed less than five weeks dropped by -203 thousand, those
unemployed between five weeks and 14 weeks increased by 56 thousand and
people who had been unemployed for 14 weeks to 26 weeks also increased
42,000. As previously noted, the long term unemployed dropped by -203
thousand. Yet do not let the decline in short and long term unemployed
fool you into thinking the job market is picking up from these
duration figures. A drop in the unemployed does not necessarily mean
they found a job.